Markets Make a Run, Rising More Than 2%

Stocks in the United States closed higher on Tuesday, sustaining a broad-based rally that for once did not lose steam at the end of the session.

As they had in recent months, the American indexes took their cues from European markets and started strong. The surge held throughout the day, and American indexes gained more than 2 percent, with the Standard & Poor’s index breaking through a crucial technical level.

To some, it was a surprising end in a market accustomed to volatility and punctuated by sudden changes in the last hour.

“We did not see selling into strength,” said Quincy Krosby, a market strategist for Prudential Financial. “The ability of the market to gain at the close is a sign that perhaps the bulls are gaining ground.”

The Dow Jones industrial average was up 2.1 percent, or 213.88 points, at 10,404.77. The Standard & Poor’s 500-stock index rose 2.35 percent or 25.60 points, to 1,115.23, and the Nasdaq was up 2.76 percent or 61.92 points, to 2,305.88.

Analysts said that once the S.& P. broke through its 200-day moving average and stayed there; a technical level, and perhaps a psychological one, had been breached for investors.

“It tells them that health is being restored into the market,” Ms. Krosby said. “Up until today it flirted with it and then pulled back.”

On Monday, for example, the market lost momentum just before the close as traders seemed to be winding down their positions, apparently not wanting to leave themselves open to developments in Europe, where sovereign debt problems have cast a pall.

“The question now becomes whether or not we see conviction buying: Do investors believe the worst is over, and we can actually work the market higher?” she said.

Art Hogan, the chief market analyst at Jefferies & Company in New York, said that crossing the moving average engendered “a self-fulfilling short cover rally.”

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“We usually have that 3 o’clock to 4 o’clock reversal of direction,” he said.

In the absence of any single headline, investors reacted to many factors, like upbeat reports from manufacturers and new indicators on trade and home building.

Commodity prices and the euro also strengthened. Crude oil rose $1.82 to $76.94 a barrel in New York trading. The euro climbed back over $1.23.

European markets finished the day higher. The DAX in Frankfurt rose 0.82 percent while the CAC-40 in Paris settled 0.98 percent higher. The FTSE 100 in London was up 0.3 percent, held back by the BP shares, which declined another 3.8 percent.

Shares in the Boeing Company were up 4 percent at $67.48 after the company said it was starting to see increased interest in its products. Caterpillar rose 4 percent to $63.46, and Illinois Tool Works was up 2.4 percent at $46.78 after it raised its forecast.

Best Buy, a bellwether for consumer spending, fell 6 percent to $38.56 after profits edged up but fell short of analysts’ expectations. “It is a good sign that we were able to take the market higher,” Ms. Krosby said.

Import prices fell 0.6 percent, from a decline in petroleum prices, but the inflation numbers embedded in the trade data showed inflation was at bay, ahead of a Federal Reserve meeting next week. That was a positive sign, she said.

The S.& P. technology sector was also higher, in part because of a forecast by the Taiwan Semiconductor Manufacturing Company of stronger global sales of computer chips. And a report by International Data Corporation showed year-on-year growth of 27 percent in the first quarter in the global personal computer market.

New economic figures showed a decline in home builders’ sentiment. The National Association of Homebuilders’ Housing Market Index fell to 17 in June from 22 in May, underscoring the importance of the government tax credit for the sector. The Empire state manufacturing index edged up to 19.57 in June from May. Though employment declined, the report indicated that the factory sector was recovering.

A version of this article appears in print on June 16, 2010, on Page B9 of the New York edition with the headline: Markets Make a Strong Run, Rising More Than 2%. Order Reprints|Today's Paper|Subscribe